Maximum an investor should pay for the common stock of firm

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Q1- What would be the maximum an investor should pay for the common stock of a firm that has a 2.5% annual growth rate and has just paid a dividend of $1.50 per year? The next dividend will be paid in exactly 1 year. The required rate of return is 12.5%.

Q2- On July 1, 2007, a bond is listed in The Wall Street Journal as a 10 5/8s of July 2009. This bond pays: $53.13 semi-annually $106.25 annually $212.50 bi-annually All of the above!

Q3- A $30,000, three-year loan calls for a total of 47% interest. The loan calls for equal, quarterly payments. What is EAR for this loan? 12.91% 13.70% 28.60% 30.62%

Reference no: EM131059727

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Maximum an investor should pay for the common stock of firm : What would be the maximum an investor should pay for the common stock of a firm that has a 2.5% annual growth rate and has just paid a dividend of $1.50 per year? The next dividend will be paid in exactly 1 year. The required rate of return is 12.5%...

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